Request By:
Mr. Joseph v. Macaluso
Director of Purchases
Jefferson County Public Schools
P. O. Box 18325
3332 Newburg Road
Louisville, Kentucky 40218
Opinion
Opinion By: Robert F. Stephens, Attorney General; By: Robert L. Chenoweth, Assistant Attorney General
As the Director of Purchases for the Jefferson County Public Schools, you have asked for an opinion on several matters involving the statutory bidding requirements for schools. Your questions relate to the monetary figure of $2,500.00 found in KRS 162.070 and 424.260. Each of these statutes require public bidding on contracts for goods and services purchased by a local board of education exceeding $2,500.00. As regards this $2,500.00 figure, you have asked the following:
1. Is this per item or on like items?
2. Is this accumulated per district or per school?
3. Does this include purchases made by booster clubs, athletic teams, P.T.A. and the like?
4. Athletic equipment purchased by each school or to be accumulated for district bid?
As noted above, Kentucky's statutory bidding provisions applicable to school districts call for competitive bidding if a contract for goods or services will be for a large enough amount. Your first two questions are to the issue of how a school district determines whether a contract is to be regarded as being for an amount sufficient to require bidding. As a prelude to our response to your questions along this line, it must be noted that there is always going to be the query as to whether those public officials responsible for making the determination on what and when to bid have acted in good faith. See Board of Education of Floyd County v. Hall, Ky., 353 S.W.2d 194 (1962); also, the annotation 53 ALR 2d 498 headed "Determination of amount involved in contract within statutory provision requiring public contracts involving sums exceeding specified amount to be let to lowest bidder."
In response to your first question, we believe the answer is found in the opinion of the Court of Appeals in the Floyd County v. Hall case, supra. Without question, work, services or commodities may not be split up for the purpose of evading the bidding statutes. Justice Palmore, writing for the Court in Floyd County v. Hall, made it clear that the bidding requirements cannot be avoided by simply buying in "dribbles and dabs." Further, we believe this case calls for the categorization of items or services to be purchased. To assist in this categorization process, it will be helpful to consider the nature of prospective bidders. Judge Palmore, in Floyd County v. Hall at page 196, wrote in this regard:
"Public contracts must be reasonably adapted to the customs and channels of trade, and reason would not demand, nor good faith normally permit, that toilet bowls and pick handles be lumped with paint and brushes under the same procurement contract."
Thus, we believe local boards of education are to establish reasonable categories or classifications of goods and services and then estimate their requirements in each of these categories or classifications and then in good faith determine whether the contract for a particular category or classification of goods or services will exceed $2,500.00.
In answer to your second question, it is necessary to understand first of all that the obligation to comply with the bidding statutes is explicitly placed upon each local board of education. A board of education is responsible for each of the public schools in its district. KRS 160.290. We are of the opinion, then, that it is the school district as a whole that has the obligation to follow the bidding statutes requirements, including application of the monetary figure. When the school district can let a singular bid to cover all goods or services of one kind needed by all the schools in the district, this aggregate need and the anticipated cost should be the yardstick used to determine applicability of the bidding statutes. Again, those responsible for letting contracts, the local board of education, must be held to the standard of acting in good faith in this regard. It may be, after good faith review by a board of education, that it would be advantageous to "zone" the school district. This might especially be so in county school districts. The costs of purchasing like kinds of goods or services for schools in different parts of a county could be quite dissimilar. If this were found to be the situation, a school board could then determine whether to zone the school district and consider taking bids accordingly. In any event, the total estimated costs of a particular category of goods or services, for the entire school district, whether zoned or not, must be considered in determining whether advertising for bids is necessary. OAG 62-730.
As for your third question, as regards school districts, the bidding statutes require bids be let for contracts exceeding $2,500.00 when you are expending school monies, whether from the general fund or activities fund. The local board of education is responsible for activity funds. State Board of Education regulation 702 KAR 3:130, copy attached, defines, in Section 1, internal accounts "as all funds derived from raising activities sponsored under the auspices of the school except that funds raised by organizations which do not come under the direct supervision of school authorities shall not be considered internal accounts." We would believe booster clubs, P.T.A., and other like associations or organizations are not under the supervision of school authorities. Although the schools in a district may benefit from the activities and money raised by such organizations and associations, there would be no requirement that these non-school monies be expended only after advertising for bids as required under KRS 162.070 and 424.260.
We are of the opinion, however, that purchases by athletic teams is a different situation. We assume you are referring to the purchase of athletic uniforms and equipment used in a school's athletic program and that the money used is that derived from admissions to interscholastic games. If this be the case, this money is "activities fund" money as referred to in 702 KAR 3:130, supra. See Board of Education of Anderson County v. Calvert, Ky., 321 S.W.2d 413 (1959); and also Commonwealth v. Collins, Ky., 379 S.W.2d 436 (1964). Purchases made on behalf of the athletic teams from this money would be subject to the bidding statutes.
The answer to your fourth question has been covered in discussing your other questions. The requirements for athletic equipment for the entire school district, based on previous experiences, should be reasonably estimatable and advertisement for bids should follow accordingly as discussed above.